How To Manage Commodity Flows Around Jakarta: In fact, what was implemented in Jakarta is a combination of both. In many developed cities, they have moved from route-based and time-based to price-based use of roads.
In our recent visit to Japan, it is apparent that a price-based principle works much better in regulating road use for HGV. As HGV operation is price sensitive, the policy to incorporate costs of road use into toll charges can help operators and drivers of HGV’s make better decisions on the routes they use.
The current regulation on toll charges does not consider congestion and road damage effects caused by HGVs in both toll roads and local roads. Future regulation on toll charges and a policy on the use of HGV will have to consider price-based mechanisms to make the system more effective.
On June 15 2011 Danang Parikesit ( A professor of transportation at Gadjah Mada University, Yogyakarta and the chairperson of the Indonesia Transportation Society ) wrote a page in Jakarta Post the following the following opinion on "Managing commodity flows around Jakarta"
"The extended policy to ban or limit operation of heavy goods vehicles (HGV) on intra-urban toll networks has created pros and cons. This policy was imposed by the Jakarta provincial government and has been supported by the Jakarta police.
Various government agencies at different levels have issued conflicting opinions in the media and have sent a negative message to the public and business communities on how public policies are formulated and implemented.
A chaotic policy making process with poor assessment strategies has led to political debates on how we should manage the flow of goods and commodities around the capital city.
The transportation network is limited and will always be limited. Provision of urban green and public spaces is important to maintain urban quality of life and attract new investment for sustainable growth. Therefore, increasing road length in urban areas should be our last resort.
Instead, the government should focus on managing the use of road space and the existing network, improving the use public transport and creating better land use to reduce trip rates and distances.
The belief that supplying urban space with more roads in response to the increasing demand for
motorized mobility have been proven wrong in many cities across the world.
Our cities should not follow this principle. Managing transport demand is believed to work more effectively, both in developed and developing cities. Managing urban road space is one implementation strategy.
The ban of intra-urban toll roads for HGV has been said to be successful by the Jakarta government. The policy has increased the speed in the intra-urban toll roads by 19.24 kilometers per hour (kph) with the major benefit enjoyed by toll road users.
Toll operators also gain from increased revenues, although they never announce it publicly. Revenue is expected to increase by 20-30 percent because of this policy. Even after the Coordinating Minister for the Economy issued a follow-up policy to limit the ban only for the Cawang–Tomang section, the greatest benefit goes to toll users and operators.
So who are the losers? Road users in the regency road network are the main losers in this policy. Not only has the congestion increased dramatically in sub-urban areas, but the risk of traffic accidents is also climbing. The use of public transportation is expected to drop significantly because of the absence of separate infrastructure such as the TransJakarta.
In the public finance context, the local governments in the south, west part and northeast areas of Greater Jakarta will be the main victims of such policy. With the delayed completion of W2 Section and E2 Section of Jakarta Outer Ring Road (JORR), the HGVs are forced to use regency roads.
This has not only created more congestion in regency road networks, but we also believe that the quality of roads will deteriorate – and very soon. It is forecast that the lifetime of regency roads will decrease rapidly, and we will witness an increase in demand of public sector financing for regency road rehabilitation next year if the policy continues.
Commodities now need to be transported over longer distances. HGV operators will face reduced profitability and will thus compromise the availability of this sector to contribute to economic development. As the price of commodities is relatively stable, the only way HGV operators can survive is to accept reduced profitability or to reduce the sub-contract value to the HGV drivers.
Many of Indonesian HGV operations are based on sub-letting agreements with drivers and therefore the drivers are the price determinant.
When the tariffs are relatively constant, the losses are transferred to the drivers, creating vulnerability in industrial operation from the threat of a drivers’ strike.
Commodity merchants lose because goods cannot be delivered on-time. State seaport operator
PT Pelindo has said there are many off-loaded containers in Tanjung Priok seaport that cannot be transported to their destinations.
On the other hand, very few containers are up-loaded on the ships, creating frustration among commodity merchants. What can we do?
Regulating the use of road space and networks can be undertaken based on routes, time of use and price of use. The route-based and time-based use of road space and network are the earliest method to increase the capacity of existing road networks.
In fact, what was implemented in Jakarta is a combination of both. In many developed cities, they have moved from route-based and time-based to price-based use of roads.
In our recent visit to Japan, it is apparent that a price-based principle works much better in regulating road use for HGV. As HGV operation is price sensitive, the policy to incorporate costs of road use into toll charges can help operators and drivers of HGV’s make better decisions on the routes they use.
The current regulation on toll charges does not consider congestion and road damage effects caused by HGVs in both toll roads and local roads. Future regulation on toll charges and a policy on the use of HGV will have to consider price-based mechanisms to make the system more effective.
The policy on banning the HGV in using intra-urban toll roads has been responded to by HGV operators overloading their cargoes and the conversion from HGV to LGV use. Overloading does not only damage roads, but it also decreases travel speed. The large size of HGVs makes it even worse.
Overloaded HGVs can not drive through roads with gradients of more than 3 to 5 percent using required minimum speed on toll roads. Stricter implementation of maximum loads for HGV would be a complimentary strategy to make sure traffic flows smoothly.
We also learned an important lesson during the HGV policy debate. It is important to continuously assess the impact of transport policies on various community groups.
A certain transport policy can benefit one community group, but might increase the costs for other groups. Ensuring a smooth and seamless flow of commodities is important, but reducing road congestion in suburbs is also equally important.
Certain policies imposed by local government agencies might contradict national policies. The case of the Jakarta HGV policy has taught us that the process of incorporating the voice of relevant stakeholders is extremely critical to listen and to plan together with business communities, commodity suppliers, transporters and road users. "
How To Manage Commodity Flows Around Jakarta
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